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Horizontal workforce hierarchies are on the horizon

Inside Small Business, 24 August, 2021

Our workforce has gone through some rapid transformations recently: how we physically work has changed through remote working and flexible work options, as well as the rapid growth of start-ups, entrepreneurs, micro-businesses, and gig economy workers.

These changes have forced us to focus on how we structure our workplace in order to create efficient, collaborative and high-performing workplaces — and this means re-thinking the traditional vertical hierarchical structure.

The consequences of rigid vertical hierarchies

Businesses are filled with vertical hierarchies that denote linear processes, limiting communication and collaboration to those directly below and above you. By slowing down communication across a business, it is harder to achieve company alignment, efficient decision making and project deadlines. These rigid processes can render a business less efficient.

These structures are also detrimental to creativity and innovation, impacting your business’ competitive position within growing markets. When you disconnect humans by keeping teams or roles in silos, you also separate skill-sets and knowledge, limiting value creation across employee and customer experiences.

Having a rigid vertical structure is also detrimental to ensuring effective communication and connection amongst employees. A breakdown of communication and connection results in poor performance reduced motivation, and higher staff turn- over.

In SMEs, we see rigid hierarchies take their toll on senior leaders and managers, as there aren’t as many checks and balances in the business to go through. This means work gets bottlenecked at the top, making efficiency lower. Adhering to this rigid structure also places a lot more work and pressure on managers and senior leaders- often leading to higher stress and burnout. All these factors form a flow-on effect for teams and employees, stifling growth and project momentum.

Many managers and leaders in the SME space are wearing multiple hats, and are involved in various aspects of the business. By holding onto this traditional hierarchy structure, we see these leaders bear the brunt of the pressure to sign off of all projects and movements within the business, leading to decision fatigue — which is not in the best interest of the business.

Horizontal hierarchies

With individuals evolving their career paths from ladders to lattices, employees are building diverse sets of knowledge that enrich their contributions at work. Each person has unique insights and worldviews to offer that should be valued to encourage transdisciplinary ways of working.

Horizontal hierarchies lead to better communication across teams and higher employee motivation. Through reconnecting different departments, promoting shared leadership and embracing diverse perspectives we can improve employee alignment and involvement.

For many SMEs, shifting to a model that promotes shared leadership and shared stake in projects and deadlines gives agency to employees, which boosts their performance and stake in business projects and outcomes. It gives employees a chance to prove their authority through autonomy and trust.

Co-design, involving experts and generalists, can be an effective tool to create richer insights and build stakeholder buy-in. This open collaboration, connecting divisions together, brings people on the journey of change-making to develop their investment in your business practices. Ultimately, businesses that reconnect humans at work will be able to better reconnect ideation and implementation. When the strategy-action gap closes, your business is better positioned to efficiently and effectively carry out your goals, resulting in higher performance and higher profits.

Innovation is an inherent part of our future workforce. With complex global problems, we need to utilise innovation in our processes, practices, and structures. One key enabler of innovation is reconnecting humans, placing open collaboration at the heart of workplaces.  While our current workplace structures aren’t set up to enable this, businesses can embrace these innovative practices to evolve their workplace structures to ensure their people and profits thrive.

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